Tuesday, May 27, 2008
“As a form, the hedge fund dates back to the 1940s. But this population explosion is of very recent origin.”
First, mortgage-backed securities. Starting in 1980 - "when scarcely any such thing existed" - they total $3.5 trillion-worth today. Then he cited "the whole range" of other newly-born asset-backed instruments - automobile loans, equipment loans, student loans, credit card-backed debt derivatives.. Take hedge funds, for example; Ferguson notes that in 1990, those financial life-forms known as "hedge funds" numbered around 600 (also including funds of funds). Now they've reproduced and multiplied up towards 10,000. "Inflation will return to the 2% target," claimed Mervyn King, head of the Bank of England - and one half of the financial furry freak brothers running Anglo-American monetary policy - last week. "Growth will eventually recover to a sustainable rate."